Companies are reevaluating their approach to supply chain management. Learn how supply chain is moving into the C-suite.
• The ability to “prepare for and adapt to unexpected events”
• To quickly adjust to sudden disruptive changes that negatively affect supply chain performance
• To continue functioning during a disruption (sometimes referred to as “robustness”)
• To recover quickly to its pre-disruption state or a more desirable state
While the CFO is often looked to as a “chief resilience officer,” global research and advisory firm Gartner notes that the route for optimizing resilience is building strong partnerships between two chief officers – finance and supply chain.
THE MOVE FROM SUPPORT TO A STRATEGIC FUNCTION
In an Accenture report, “Drive Your Own Disruption: Is Your Supply Chain in Sleep Mode?” 900 supply chain executives reported seeing their function as either a cost-efficiency driver (60%) or a support function (68%) rather than as a competitive differentiator (48%) or a growth enabler (53%).
The study’s conclusion: The keys to achieving growth lie in increased C-suite engagement with managing the supply chain function, along with agile and efficient adoption of technologies to enable a new way of working.
The bottom line points to organizations without a strategic C-suite supply chain leader could be leaving significant value on the table.
THE CASE FOR RETHINKING THE ROLE
Shay Scott, executive director, Global Supply Chain Institute, University of Tennessee, said, “A decade ago, most supply chain leaders were focused on functional operational issues within their own areas of the supply chain such as procurement, logistics, or manufacturing operations. The C-suite was several managerial levels removed, making direct communication rare. Cost-cutting was often seen as the major value that supply chain could provide to the business.”
MAKING THE MOVE
For companies considering adding strategic supply chain experts to their C-suite, Gartner offers insights, advice and guidance to chief supply chain officers as they assume new or enhanced roles.
•Boards of directors and their CEOs look for both competence and confidence
•A chief supply chain officer (CSCO) must have both its own capabilities and a team adept at managing risk
• Good communication and collaboration skills are a must to keep the board informed on potential risks and how they are being managed
• An ability to inspire confidence evolves from these skills—and is key to success
Many supply chain officers are preparing for a place in the C-suite by expanding their strategic skills through post-graduate education. And business schools have taken notice. MBA admissions consulting firm Aringo reports that supply chain is one of the most popular specialization areas among the nation’s graduate business programs. For supply chain officers preparing to make a move to enhanced roles and strong partnership with board members, CEOs and CFOs, U.S. News offers a list of the nation’s best supply chain-specific graduate business programs including those at the universities of Michigan, Ohio State, Purdue, Loyola Chicago, Marquette and Northwestern, as well as others.
PREPARATION: THE LYNCHPIN OF RESILIENCE
While the nation’s manufacturers, their suppliers, and customers recover from what all hope will be a once-in-a-century crisis, experts in finance, medicine and climate tell us that indicators point to preparation as critical for success. Crafting strategies for a resilient supply chain program should include: a strategic C-suite supply chain officer, robust forecasting, scenario planning, contingency planning, and building a strong supply chain management function.
But that preparation also includes expecting the unexpected. Online magazine Financial Management offers advice to business leaders on how they should prepare for the next global upheaval: “A crisis may require a business to throw out its budget and pivot at short notice.”
At the heart of successful business resilience strategies—and preparing for crisis—is not only a supply chain management leader at the table, but it is also leveraging the right experts to guide you. Pivotal to making the most of those strategies—particularly when budgets are in question—will be your bank, banker, and organization’s supply chain finance experts who take a global view.
“An integral component to stability and resiliency in a company’s supply chain includes prioritizing an ongoing supply chain finance strategy with their banking partner,” stated Emy Ruiz, vice president, head of Global Trade sales team, Fifth Third Bank. “Access to instant working capital for the majority of the company’s supplier base would minimize disruption, create funding options and strengthen key relationships.”
Brandon Ferrera serves as Southern California market executive for Fifth Third Bank. Bringing more than a decade of executive-level experience in relationship banking to his role, Ferrera’s teams focus on developing and maintaining relationships with both privately-owned and private-equity-owned middle-market clients, supporting their growth with financing for leveraged buyouts, acquisitions, working capital and growth capital.